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American Public Education (APEI) Q2 Earnings Beat Estimates

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American Public Education, Inc. (APEI - Free Report) reported second-quarter 2018 earnings per share of 39 cents, beating the Zacks Consensus Estimate of 33 cents. The reported earnings also increased 69.6% from the year-ago profit of 23 cents owing to solid cost management.

Revenues and Enrollment

Total revenues of $72.8 million narrowly missed the consensus mark of $72.9 million. Revenues grew 1% year over year. Higher contribution from Hondros College of Nursing (HCN) was partly offset by lower contribution from the American Public University System (APUS).

The company operates through two segments — American Public Education or APEI segment and HCN segment.

APEI primarily includes the operational activities at APUS, other corporate activities, and minority investments.

Revenues decreased 1% to $63.7 million due to a decline in enrollment and net course registrations by new students.

During the quarter, total net course registration at APUS remained flat year over year and net course registrations by new students fell 1%. Student enrollment at APUS declined 4% year over year as of Jun 30, 2018.

HCN revenues rose 15.4% to $9.1 million in the second quarter owing to higher enrollments.

Total enrollment in the HCN Programs increased 17% year over year to 2,020 students and new student enrollment rose 5% year over year.

American Public Education, Inc. Price, Consensus and EPS Surprise

 

American Public Education, Inc. Price, Consensus and EPS Surprise | American Public Education, Inc. Quote

Inside the Headline Numbers

Income from operations before interest income and income taxes grew 27.4% to $8 million compared with $6.3 million in the prior-year quarter.

APUS’ operating income amounted to $7.2 million, reflecting an increase of 26.6% year over year. On the other hand, HCN’s operating income grew 34.2% to $879 million in the quarter.

Total costs and expenses declined 1.7% year over year to $64.8 million in the quarter.

Financials

As of Jun 30, 2018, total cash and cash equivalents were approximately $193.6 million compared with $179.2 million on Dec 31, 2017.

Capital expenditures were approximately $3 million in the first six months of 2018, down from $3.8 million a year ago. Net cash provided by operating activities amounted to $19.6 million in the said period compared with $16.3 million a year ago.

Q3 Guidance

Total revenues are expected to decline between 3% and 0% year over year.

The company expects earnings in the range of 28-33 cents per share. This compares with 27 cents per share reported in the third quarter of 2017.

At APUS, net course registrations by new students are expected to decline 13-8% on a year-over-year basis. Net course registrations are likely to decrease between 6% and 2% year over year.

Meanwhile, at HCN, new student enrollment is projected to decline approximately 3% year over year and total student enrollment is estimated to grow about 11%.

Zacks Rank

Currently, American Public Education carries a Zacks Rank #3 (Hold). You can the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Releases

Strategic Education, Inc. (STRA - Free Report) or SEI announced that Strayer Education, Inc. and Capella Education Company have completed the proposed merger deal to create SEI, a national leader in education innovation.

Strayer Education came up with adjusted quarterly earnings of 87 cents per share, in line with the Zacks Consensus Estimate. Adjusted earnings grew 33.8% from 65 cents per share in the year-ago period.

Meanwhile, Capella Education’s adjusted earnings of $1.05 per share in the quarter surpassed the Zacks Consensus Estimate of $1.04. Earnings were 90 cents per share in the year-ago quarter. (Read more: Strategic Education Takes Shape, Q2 Earnings in Focus)

Universal Technical Institute, Inc. (UTI - Free Report) recently reported fiscal third-quarter 2018 results. Adjusted loss of 52 cents per share in the quarter was wider than the Zacks Consensus Estimate of 48 cents and the year-ago quarter’s 21 cents.

Upcoming Peer Release

Adtalem Global Education Inc. (ATGE - Free Report) is slated to release fourth-quarter fiscal 2018 results on Aug 16, 2018. The Zacks Consensus Estimate for the company’s quarterly earnings of 90 cents is expected to grow 15.4% year over year.

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